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The influence factors of the national roles in the FDI network: A combined methods of complex networks and Panel Data Analysis

Asma Arif, Pengli An, Yajie Qi, Huajiao Li, Haizhong An, Mujahid Hussain and Yanli Wang

Physica A: Statistical Mechanics and its Applications, 2021, vol. 563, issue C

Abstract: This paper examines the influence factors of Foreign Direct Investment (FDI) and focuses on the two main questions to be answered: (1) How do the foreign direct investment (FDI) network form and (2) what factors affect the formation of foreign direct investment (FDI) Network. First, we identify the basic FDI relationship in the homogeneous complex network of nations from 2001 to 2012. Then, we use the network indicators such as FDI relationships, independence, information control ability, FDI inflows and FDI outflows in FDI relations to construct the panel regression model to analyze the influence factors for Foreign Direct Investment. The results indicate that (1) The number of the nations with FDI relationships is increasing for 2001 to 2012, which highlight the importance of FDI relationship; (2) The nations in the FDI relationship network are getting closer and closer and the information of the network is controlled by few nations; (3) National competitiveness and inflows of FDI are directly related to each other; (4) Depreciation of exchange rate against USD increase FDI. This paper can help policymakers to better understand the features of FDI and thereby provides new insight for attracting FDI to promote economic growth.

Keywords: Foreign direct investment; Complex network; Trade openness; Neoclassical economies; Classical theory of trade (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.physa.2020.125311

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